Report: Facebook Advertising by Brands For Their Pages Increased 1900% Year Over Year

Facebook Ads API tool and managed-spend service provider TBG Digital has released its Global Facebook Advertising Report for 2011 Q2 (.PDF). The report indicates that the number of Facebook ad impressions brands bought to gain fans for their Facebook Pages increased 104% in Q2, and 1900% year over year. TBG Digital says it ran 60 billion ad impressions in 2011 Q2, and just under half were brand advertising of this nature, so we can interpret that the actual number of impressions of ads for brand Pages run by the company’s clients has grown from approximately 1.4 billion to 27 billion.

Other key findings include that ads aimed at driving sales had a more than 350% higher conversion rate when aimed at existing Facebook fans, advertising by retailers has grown significantly to 36% of total impressions, and Facebook’s Sponsored Stories ad unit produced a 32% lower cost per acquisition.

The report shows that Facebook Pages have become so important to brand presence on Facebook that brands are aggressively increasing spend on fan acquisitions. It also demonstrates building a fan base produces clear return on investment by lowering the cost of attaining sales and additional fans.

The data for TBG Digital’s report analyzes a total of 200 billion impressions ran in 21 countries by 167 clients of the company’s licensable ad management tool and managed spend service. The tool and service both allow clients to tap into Facebook’s Ads API to more efficiently create ad variants, A/B test to find top performing creative and targeting combinations, optimize bids, and analyze results in order to get a higher return on spend than would be possible by running ads manually.

Showing Facebook as a good place to advertise is in the interest ofTBG Digital’s business, so one could expect there to be some potential for bias. However, the company had the report’s methodology and conclusions verified by The Psychometrics Centre of University of Cambridge.

In the recent past TBG Digital reports have shown that Facebook’s Sponsored Stories ad units provides a 46% higher click through rate, a 20% lower cost per click, and an 18% lower cost per fan than Facebook’s standard ad units. For those less familiar, Sponsored Stories take the actions of friends such as Liking a Page and turns them into Facebook sidebar ads that show the friend’s name and face. TBG Digital  also indicated that by advertising to Facebook fans rather than non-fans, acquisition costs can be lowered for registrations by 44%, for event signups by 33%, and for purchases by 15%.

Brands Push to Gain Fans Before Price Increases

Brands, recognizing the value of Facebook fans, have been pouring money into upping their Like counts this year. In 2010 Q2, most Facebook advertising pointed offsite, either to brand websites or purchase sites. Total share of impressions pointing offsite has since dropped to just above 50%. Now, ads pointing to Facebook Pages now make up nearly half of all impressions, having risen 1900% since 2010 Q2, and 104% during 2011 Q2.  This data is based on 170 billion ad impressions for 146 clients.

Brands may be concerned that as adoption of Facebook by businesses increases, so will the cost per acquisition of fans. Therefore, brands are trying to amass large fan bases while doing so is still relatively cheap. The shift towards ads pointing within Facebook benefits the social network, as clicks of these ads lead to it being able to serve more ad impressions.

With High Conversion Rates for Fan-Targeted Ads, Retail Spends More

The retail and finance industry spending on Facebook ads significantly increased during 2011 Q2 when analyzing 120 billion impressions. Retail now makes up 36% of all Facebook ad impressions, and Food and drink industry spending has also increased. A 60 billion impression study shows that retail advertising saw the highest click through rate, followed by arts and entertainment, and food and drink.